Telekom Austria cuts revenue forecast for 2015

Telekom Austria cut its group revenue forecast for 2015 as a whole due to the "below-plan" performance of its mobile and fixed businesses in South East Europe.

In the presentation of its second-quarter and first-half results for 2015, the operator said revenue guidance for the full-year was reduced from growth of 2 per cent to approximately stable, although it noted that the proposed dividend has remained unchanged at €0.05 and the total investment volume is expected to continue to range between €700 million ($762 million) and €750 million.

Analysts did not appear too concerned about the downward revision. Jefferies International analysts noted that while the downgrade is "obviously unwelcome" it is largely a result of macro economic effects. "For us, the key takeaway from the quarter is the evidence that Telekom Austria is navigating the more complex domestic mobile environment adeptly," the analysts said, noting that the company has achieved its first revenue growth in Austria in at least four years.

In the second quarter of 2015, revenue at the Austria-based group increased year-on-year by 2.1 per cent to €982.8 million, while comparable EBITDA was 9.1 per cent higher at €326.8 million. Taking account of foreign exchange and one-off effects, "clean" revenue growth was 0.8 per cent and EBITDA growth 2.2 per cent. Net income in the quarter improved to €78.6 million, after the company posted a group net loss of €305.1 million a year ago due to the write-down on its Bulgarian business.

In the domestic market, second-quarter revenue grew by 6 per cent to €618.5 million, or by 1.1 per cent excluding foreign exchange and one-off effects. However, revenue was lower in all other markets, with rates of decline ranging from -1.1 per cent in Belarus to -5.9 per cent in Bulgaria, which continues to face challenging market conditions.

In the first six months of 2015, "clean" group revenue remained stable at €1.94 billion, while EBITDA grew by 2.4 per cent to €665.3 million. Excluding foreign exchange and one-off effects, comparable EBITDA increased by 7.4 per cent to €665.3 million.

The comparable EBITDA margin grew by 2.4 percentage points to 34.3 per cent. The group also posted net income of €171.4 million in the first six months, compared with a year-ago loss of €264.3 million.

Outgoing CEO Hannes Ametsreiter said the company had achieved its best set of results in six years. "Particularly worthy of mention in this context is the great performance of the Austrian business," he added.

Vodafone Germany recently announced it plans to appoint Ametsreiter as its CEO with effect from Oct. 1. According to Reuters, the Telekom Austria supervisory board is to meet on July 24 to discuss possible contenders for the CEO position.

For more:
- see the Telekom Austria results presentation
- see this Reuters article

Related articles:
Telekom Austria wins regulatory approval for Macedonia merger
Hannes Ametsreiter quits as Telekom Austria CEO; successor not yet named
Telekom Austria to buy fixed operations in Slovenia and Croatia
Telekom Austria brings SE Europe management in line with América Móvil model
Telekom Austria more than doubles Q1 profit as revenue declines slow

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